IT’S TIME FOR A HISTORY LESSON

First, let’s go back a bit further — to 1925 — when Caterpillar was founded. As it was establishing itself as a leading equipment manufacturer, the concept of remanufacturing parts to lower ownership costs associated with engine and equipment components was just gaining steam. After spending several decades growing its business, Caterpillar leapt into the remanufacturing market to provide customers with affordable, sustainably produced products available through its network of dealers.

As John Disharoon, former Director of Market Access for Cat Reman, explained to the Rochester Institute of Technology: “One of the benefits of Caterpillar’s Reman business model is that it is essentially a closed-loop system. Caterpillar sells a remanufactured product to a dealer and charges a core deposit on the sale. When the core is returned, the deposit is refunded, thus lowering the total transaction cost for the customer and ensuring a high likelihood of the core return.”

Once the core is approved by dealer inspection, the core journeys through the Cat Reman process where it’s inspected, disassembled, cleaned, salvaged and remanufactured to match OEM standards while incorporating the latest upgrades. After it passes a final round of testing, the remanufactured part re-enters the supply chain as a new Cat Reman product.

This circular economy has been spinning for decades and will keep spinning into the future. But back in the early 1970s, there wasn’t much of a model for the remanufacture of engines and other heavy equipment components in the United States. Caterpillar had to make the mold.

According to current Cat Reman team members, the program’s path to present-day success has been clear. As Bob Paternoga, Cat Reman Vice President and General Manager, puts it: “Initially, the messaging back in the early 1970s was more, not necessarily external-focused, but more internally focused, in that, ‘Hey, this is a pretty good value for the company, Caterpillar, and that it will help us reduce our warranty expenses’ … Over time [that] expanded into other industries.”

Trent Tippey, Cat Reman Commercial Manager of Construction Industries, elaborates: "We also take a lot of stewardship in what we do, not only particularly for our customers, but also for an industry. And as we continue to think about where Cat Reman can play helping our customers achieve their business objectives going forward, I think it's going to be even more important … as the portfolio of Caterpillar continues to diversify and grow, the segments that we continue to support, continue to grow and evolve as well."

Today, Cat Reman is a shining example of the staying power of Cat products as well as Caterpillar innovations. Nearly 50 years ago, Cat Reman was just another bold idea from the Caterpillar team. Now, it’s a global program which provides over 8,000 unique parts, components and kits to customers. These sustainably remanufactured parts are available for up to 60 percent off the price of new products — giving equipment new life for a fraction of the cost. It’s a half-century investment that’s been good for Caterpillar and, ultimately, good for customers.